The United States Securities and Exchange Commission (SEC) has recently announced a delay in its decision regarding several proposals for spot Bitcoin exchange-traded funds (ETFs), including BlackRock. This comes ahead of an expected government shutdown, which is anticipated to disrupt financial regulators and federal agencies.
In addition to BlackRock, the spot Bitcoin ETF applications of Invesco, Bitwise, and Valkyrie have also been delayed by the SEC, according to separate filings on September 28. Bloomberg ETF analyst James Seyffart predicts that the applications from Fidelity, VanEck, and WisdomTree will also face delays by the securities regulator.
These delays have arrived two weeks earlier than the scheduled second deadline date for many applicants, who had anticipated a response from the SEC between October 16 and 19. Seyffart believes that the timing of these delays is linked to the potential government shutdown on October 1, which has caused uncertainty and disrupted operations across various federal agencies.
To avoid a shutdown, both the House and Senate need to agree on funding bills to finance government operations and pass 12 separate full-year funding bills by October 1. However, as of now, no agreement has been reached.
This is not the first time that the SEC has postponed spot Bitcoin ETF applicants. Late last August, the securities regulator delayed a group of these applications when the first deadline was looming.
Looking ahead, the third set of deadlines for the seven firms is expected to fall around mid-January, but there is a possibility that they could be further delayed. At the very latest, the SEC will have to make a final decision by mid-March.
In late August, Bloomberg ETF analyst Eric Balchunas estimated that the probability of a spot Bitcoin ETF being approved by the end of 2023 had increased to 75%. He attributed this increase to the unanimity and decisiveness of the U.S. Court of Appeals Circuit in Grayscale’s court victory over the SEC.
Balchunas even raised the odds to 95% by the end of 2024.
These delays in approving spot Bitcoin ETFs have implications for the cryptocurrency market. Many investors and enthusiasts have been eagerly awaiting the launch of these ETFs, as they are seen as a way to attract institutional investors and bring more legitimacy to the crypto space.
However, with the delays and uncertainty surrounding the SEC’s decision, it remains to be seen when and if spot Bitcoin ETFs will be approved. Regardless, the crypto market continues to evolve and grow, with or without the launch of these ETFs.
